(1)
Offers or sells a security in violation of G.S. 78A-8(1), 78A-8(3), 78A-10(b),
78A-13, 78A-14, 78A-24, or 78A-36(a), or of any rule or order under G.S. 78A-49(d)
which requires the affirmative approval of sales literature before it is used,
or of any condition imposed under G.S. 78A-27(d) or 78A-28(g), or

(2)
Offers or sells a security by means of any untrue statement of a material fact
or any omission to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading (the purchaser not knowing of the untruth or omission), and who
does not sustain the burden of proof that he did not know, and in the exercise
of reasonable care could not have known, of the untruth or omission,

is
liable to the person purchasing the security from him, who may sue either at
law or in equity to recover the consideration paid for the security, together
with interest at the legal rate from the date of payment, costs, and reasonable
attorneys' fees, less the amount of any income received on the security, upon
the tender of the security, or for damages if the purchaser no longer owns the
security. Damages are the amount that would be recoverable upon a tender less
the value of the security when the purchaser disposed of it and interest at the
legal rate as provided by G.S. 24-1 from the date of disposition.

(b)
Any person who purchases a security by means of any untrue statement of a
material fact or any omission to state a material fact necessary in order to
make the statements made, in the light of the circumstances under which they
are made, not misleading (the seller not knowing of the untruth or omission),
and who does not sustain the burden of proof that the person did not know, and
in the exercise of reasonable care could not have known, of the untruth or
omission, shall be liable to the person selling the security to him, who may
sue either at law or in equity to recover the security, plus any income
received by the purchaser thereon, upon tender of the consideration received,
or for damages if the purchaser no longer owns the security. Damages are the
excess of the value of the security when the purchaser disposed of it, plus
interest at the legal rate as provided by G.S. 24-1 from the date of
disposition, over the consideration paid for the security.

(b1)
A person who willfully violates G.S. 78A-12 is liable to a person who purchases
or sells a security, other than a security traded on a national securities
exchange or quoted on a national automated quotation system administered by a
self-regulatory organization, at a price that was affected by the act or
transaction for the damages sustained as a result of the act or transaction.
Damages are the difference between the price at which the securities were
purchased or sold and the value the securities would have had at the time of
the person's purchase or sale in the absence of the act or transaction, plus
interest at the legal rate as provided by G.S. 24-1 from the date of the
purchase or sale, costs, and reasonable attorneys' fees determined by the
court.

(c)
(1) Every person who directly or
indirectly controls a person liable under subsection (a), (b), or (b1) of this
section, every partner, officer, or director of the person, every person
occupying a similar status or performing similar functions, and every dealer or
salesman who materially aids in the sale is also liable jointly and severally
with and to the same extent as the person, unless able to sustain the burden of
proof that the person did not know, and in the exercise of reasonable care
could not have known, of the existence of the facts by reason of which the
liability is alleged to exist.

(2)
Unless liable under subdivision (1) of this subsection, every employee of a
person liable under subsection (a), (b), or (b1) of this section who materially
aids in the transaction giving rise to the liability and every other person who
materially aids in the transaction giving rise to the liability is also liable
jointly and severally with and to the same extent as the person if the employee
or other person actually knew of the existence of the facts by reason of which
the liability is alleged to exist.

(3)
There is contribution among the several persons liable under subdivisions (1)
and (2) of this subsection as provided among tort-feasors pursuant to Chapter
1B of the General Statutes.

(d)
Any tender specified in this section may be made at any time before entry of
judgment. Tender shall require only notice of willingness to exchange the
security for the amount specified. Any notice may be given by service as in
civil actions or by certified mail addressed to the last known address of the
person liable.

(e)
Every cause of action under this statute survives the death of any person who
might have been a plaintiff or defendant.

(f)
No person may sue under this section for a violation of G.S. 78A-24 or G.S. 78A-36
more than two years after the sale or contract of sale.

No person may sue under this
section for any other violation of this Chapter more than three years after the
person discovers facts constituting the violation, but in any case no later
than five years after the sale or contract of sale, except that if a person who
may be liable under this section engages in any fraudulent or deceitful act
that conceals the violation or induces the person to forgo or postpone
commencing an action based upon the violation, the suit may be commenced not
later than three years after the person discovers or should have discovered
that the act was fraudulent or deceitful.

(g)
(1) No purchaser may sue under this
section if, before suit is commenced, the purchaser has received a written
offer stating the respect in which liability under this section may have arisen
and fairly advising the purchaser of his rights; offering to repurchase the
security for cash payable on delivery of the security equal to the
consideration paid, together with interest at the legal rate as provided by
G.S. 24-1 from the date of payment, less the amount of any income received on
the security or, if the purchaser no longer owns the security, offering to pay
the purchaser upon acceptance of the offer an amount in cash equal to the
damages computed in accordance with subsection (a); and stating that the offer
may be accepted by the purchaser at any time within 30 days of its receipt; and
the purchaser has failed to accept such offer in writing within the specified
period.

(2)
No seller may sue under this section if, before suit is commenced, the seller
has received a written offer stating the respect in which liability under this
section may have arisen and fairly advising the seller of his rights; offering
to return the security plus the amount of any income received thereon upon
payment of the consideration received, or, if the purchaser no longer owns the
security, offering to pay the seller upon acceptance of the offer an amount in
cash equal to the damages computed in accordance with subsection (b); and
providing that the offer may be accepted by the seller at any time within 30
days of its receipt; and the seller has failed to accept such offer in writing
within the specified period.

(3)
Offers shall be in the form and contain the information the Administrator by
rule prescribes. Every offer under subsection (g) of this section shall be
delivered to the offeree or sent by certified mail addressed to the offeree at
the offeree's last known address. The person making the offer shall file a copy
of the rescission offer with the Administrator at least 10 days before
delivering the offer to the offeree. If an offer is not performed in accordance
with its terms, suit by the offeree under this section shall be permitted
without regard to this subsection.

(h)
No person who has made or engaged in the performance of any contract in
violation of any provision of this Chapter or any rule or order hereunder, or
who has acquired any purported right under any such contract with knowledge of
the facts by reason of which its making or performance was in violation, may
base any suit on the contract.

(i)
Any condition, stipulation, or provision binding any person acquiring any
security to waive compliance with any provision of this Chapter or any rule or
order hereunder is void.

(j)
The rights and remedies provided by this Chapter are in addition to any other
rights or remedies that may exist at law or in equity, but this Chapter does
not create any cause of action not specified in this section or G.S. 78A-37(d).
If the requirements of Chapter 1D of the General Statutes are met, punitive
damages are available to the extent provided in that Chapter.

(k)
The purchaser of a viatical settlement contract may rescind or cancel the
purchase agreement for any reason by providing written notice of rescission or
cancellation to the issuer or the issuer's agent, by certified mail, return
receipt requested, within 10 business days after each of the following: (i) the
date on which the purchase agreement for the viatical settlement contract is
signed by the purchaser, and (ii) the date of actual notice to the purchaser of
the assignment, transfer, or sale of all or a portion of an insurance policy on
which the viatical settlement contract is based. Notice of rescission is
effective upon deposit in the United States mail. The notice of rescission need
not take a particular form and is sufficient if it expresses the intention of
the purchaser to rescind the transaction. For purposes of this subsection and
subsection (k1) of this section only, the rescission period of 10 business days
following the purchaser's signing of the purchase agreement shall also be known
as the "initial 10-day rescission period."

(k1)
Immediately upon receipt of any consideration by an issuer or its agent
pursuant to a viatical settlement purchase agreement, the issuer or its agent
shall deliver the consideration to a domestic independent escrow agent. For
purposes of this section, "domestic independent escrow agent" means
an escrow agent, located in this State, and not affiliated with the issuer, its
affiliate, its officers or directors, or its promoter, or any agents thereof.
The domestic independent escrow agent shall maintain the funds received, in
their entirety, in an escrow account or trust account located in this State,
for the initial 10-day rescission period following the signing of the purchase
agreement, as provided in subsection (k) of this section, unless the domestic
independent escrow agent, prior to the completion of the initial 10-day
rescission period, receives notice of the purchaser's cancellation or
rescission of the purchase agreement in accordance with this section. If the
purchase agreement is rescinded or cancelled within the initial 10-day
rescission period, the domestic independent escrow agent shall immediately
deliver the funds, in their entirety along with any interest earned on the
funds during the time in which the funds were held in escrow, to the purchaser
upon receiving notice, by certified mail, from the issuer or its agent that the
purchase agreement has been rescinded or cancelled by the purchaser. If the
purchase agreement has not been rescinded or cancelled within the initial 10-day
rescission period, the domestic independent escrow agent shall release the
funds to the issuer or its agent in a manner to be determined by agreement
between the issuer and the domestic independent escrow agent. Until the funds
become available for release by the domestic independent escrow agent to the
issuer upon the expiration of the initial 10-day rescission period without
rescission or cancellation by the purchaser, the funds are not subject to
claims by creditors of the issuer, its affiliates, or associates.

(l)
Within 90 days after the sale or execution of a contract of sale for an
investment of funds intended to be used to purchase a viatical settlement
contract or contracts, the seller shall provide the purchaser with a rescission
offer in accordance with rules prescribed by the Administrator, if, within that
period, there has not been the identification of each and every viatical
settlement contract acceptable to the purchaser which has been or shall be
purchased for the investment. The purchaser may accept the rescission offer
within 10 business days after receiving it. Acceptance of the rescission offer
is effective upon compliance by the purchaser with the procedural requirements
for notice of rescission or cancellation by a viatical settlement purchaser set
forth in subsection (k) of this section. The seller shall keep a record of the
rescission offer and its acceptance or rejection for at least three years after
providing that offer and shall provide that record to the Administrator at the
Administrator's request. For purposes of this subsection only,
"purchaser" means a person who executes a contract of sale, with a
seller, for an investment of funds to be used to purchase a viatical settlement
contract or viatical settlement contracts when, at the time of execution of the
contract, each and every viatical settlement contract to be purchased pursuant
to the investment has not been identified. (1925, c. 190, s. 23; 1927, c. 149, s. 23; 1955, c.
436, s. 10; 1971, c. 572, s. 2; 1973, c. 1380; 1975, c. 19, s. 22; c. 144, s.
3; 1977, c. 781, s. 2; 1983, c. 817, ss. 20, 21; 1987, c. 282, s. 9; 1991, c.
456, s. 5; 2001-183, s. 1; 2001-436, s. 11; 2003-413, ss. 5-10.)